Mexico's attempts to attract foreign companies to its oil sector finally appear to be paying off. After seeing only lukewarm interest in its first round of bidding on oil blocks in July, Mexico held a subsequent tender on September 30 that was largely deemed a success.

The promising results will likely dispel most of the doubts surrounding the contractual terms that Mexico City is offering to international oil companies, setting the stage for a successful launch of bidding later this year on the country's potentially lucrative deep-water blocks in the Gulf of Mexico.

Mexico's willingness to compromise with foreign participants has been a consistent theme of the Round One bidding. There has been an ongoing dialogue between Mexico City and international oil companies, meant to ensure that the government can work out the kinks in its offerings.

Even before the first tender began in July, Mexico made several key changes to the process aimed at attracting greater participation, including a stipulation that the "adjustment mechanism" — a feature created to give Mexico City a greater share of revenue in the event that a project yields extraordinary profits — would not kick in until oil companies gained a higher rate of return on their investment in the blocks.

The Mexican government raised the threshold of the adjustment mechanism, originally triggered at a rate of return of 15 percent, to 20 percent before the first tender and again to 25 percent for the September 30 bid.

Based on the outcome of the Sept. 30 round of bidding, Mexico's changes worked. The second tender of blocks were shallow-water blocks with proven reserves. The bid for the first block alone signaled that the entire round would be a success; on its own, it attracted more interest than all of the blocks in the July tender combined.

The first block received nine bids, all well above Mexico's minimum bid requirements, and in the end it was awarded to Italy's Eni, which offered the Mexican government an 83.75 percent share in the production-sharing contract. (Mexico's minimum requirement is just 34.8 percent.)

Meanwhile, Mexico City awarded two of the remaining blocks to consortiums led by Argentina's Pan American Energy (60 percent of which is owned by BP) and by the United States' Fieldwood Energy (the largest U.S. operator in the United States' shallow waters). Each of the consortiums offered the Mexican government shares of at least 70% in their production-sharing contracts.